student loans for those bloody lazy students, turns middle class familiess into bludgers through working

for families and stifiles entraprenuralism and enterprise with taxes.

God they must be fuming. Yesterday’s budget, which surprised me by han

My National Party voting friends and colleagues have for the last 9 years harangued me about that bloody overtaxing government that gives the dole to people too lazy to work, funds interest free student loans for those bloody lazy students, turns middle class families into bludgers through working for families, does nothing to drag us into the top half of the OECD or to close the wage gap with Aussie, and stifles entrepreneurial and private enterprise by not slashing taxes.

So I suppose they were fuming yesterday as Bill English delivered his government’s first Budget. Tax cuts cancelled, entitlements (to dole, interest free student loans, working for families, level of national super) mostly retained, no bold growth focused policies to rocket us up the OECD rankings and nothing to address the wage gap.

The Budget was bland and that is not an entirely bad thing. As many commentators have noted, there was no deep dark secret agenda. This (minus the mad move to forget about saving for superannuation for a decade or two) was a Labour budget on a strict diet, but without any vision. It just goes to show how significant an impact the last government has had on shifting this country’s political debate leftward.

So will grumpy National voters be taking to the streets to demand their tax cuts, and that those bloody students and beneficiaries be given a good kicking? I don’t think so. As their rhetoric was, after all, only hot ‘grumpy old man’ air in the first place.

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7 Comments to “Will there be howls of outrage?”

Not really howls of outrage, but certainly sighs of longing. Even up to February most Nats seemed to be expected the next two rounds; Treasury’s updated data killed those expectations stone dead.

This is a case where English and Key simply had to bite a bullet. It sucks, but it’s a fact of being in Government. You build up a kinda wishlist in Opposition & it seems plausible, but there’s a status quo bias: you forget it’s all predicated on the good times rolling on. Then, ya get into Government and realize you can’t afford the pony after all.

What I meant: you put a policy package together. In doing so, you make a series of assumptions about the world you’re operating in. These assumptions are skewed because of a status quo bias; in this case, that the fairly benign times would continue.

Up until about February, it was looking like tax cuts would still be viable. Then Treasury updated its forecasts, essentially saying things are much worse than they looked in October 2008, or even December 2008. The tax cuts became unviable.

Would Labour have reneged on manifesto policies? Maybe, maybe not. If not, then presumably it’d be because they’re running a “fiscal stimulus” kind of theory. I’m agnostic, leaning sceptical, about that.

Fair enough BK, and nicely put, but it does rather rest on the assumption that Treas forecasts are are the bees knees. They are probably very good at being what they are, and the treas is probably constrained about the sorts of assumptions they are allowed to make. But those constraints are known, and should, I think, be taken into account when making up the policy package.

There were plenty of people talking for the last half of last year about how economic conditions were going to be very dire indeed. We know that treasury, bless their anally retentive hearts, are very conservative about what they say. This caused them to underestimate the surpluses year in year out over the last decade or so. Cullen was saying that the Nat’s plan wasn’t going to be doable. The Nats happily ran with a bunch of assumptions that they should have known were no good.

Given this, I think that for them to hide behind what treasury was saying is a bit iffy. Might fly for them politically, but I’m not buying the idea that they really thought those projections were accurate.